Australian companies are following in the footsteps of the federal government, increasingly procuring goods and services from Indigenous-owned firms and establishing procurement targets as they step up their commitment to socially responsible behaviour.

KPMG has become the first professional services firm to appoint an Indigenous business as its preferred vendor, and the Business Council of Australia (BCA) is working on an Indigenous procurement framework for its members.

In the coming months the BCA is expected to set a target of 3 per cent of annual contracts to be awarded to Indigenous-owned businesses within five years. It is the same target set by the federal government in June 2015 under the Commonwealth’s Indigenous Procurement Policy. The BCA initiative follows several months of discussions between 21 of its members, including mining behemoth BHP, Commonwealth Bank, Qantas and Lendlease, and Supply Nation, which houses a database of verified Indigenous businesses.

'Significant' agreement

KPMG has promised to spend 2 per cent of its procurement budget with Indigenous firms by 2020. It has signed an agreement to purchase stationery from Muru Office Supplies (MOS), a majority Indigenous-owned company that is a joint venture between Muru Group and Complete Office Supplies (COS), Australia’s largest family-owned office supplies company.

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Supply Nation chief executive Laura Berry describes the agreement as “significant”. Of KPMG’s 2 per cent procurement target, she says: “I welcome any corporate or organisation that is stepping up to adopt a target for Indigenous procurement.”

KPMG says: “This Indigenous procurement is a step closer to MOS [which is] supporting current and future Aboriginal Australian businesses by giving a portion of their profits to community education initiatives. A recent activity MOS drove was an IT literacy training program to help educate members of remote Indigenous communities in the area of technology.

“The Indigenous business sector is growing rapidly, and faster than the rest of the economy.”

Gaining momentum

Berry notes membership of Supply Nation has more than doubled to 360 companies and government organisations since mid-2015, and the number of suppliers has trebled to more than 1500. Since 2015 the federal government has contracted more than $1 billion of goods and services from Indigenous firms.

COS chief Dominique Lyone says that while the joint venture between his company and Muru Group had a slow start, it is gaining momentum. He expects the venture’s turnover to exceed $10 million in the 2019 financial year and double over the next three years. Existing clients include Fortescue Metals and building supplies group Boral.

In June 2015 the Coalition announced the federal government would allocate 3 per cent of its annual contracts to Indigenous-owned businesses with fewer than 200 employees.